Heading into 2023, what can financial professionals expect, especially if they are looking for a new job? As employers come off the heels of a very aggressive hiring period, there is concern of a looming recession, due to factors like inflation and global volatility. “Economic uncertainty has led to mixed messages, but it is important to note that the job market is still strong,” explains Eric Vaheb, a Director within Tandym Pro’s Financial Services division. “For finance professionals, this economy can be difficult to navigate, but we’re here to help.” When you’re not sure what 2023 will bring for your career, our financial services recruitment team recommends the following considerations:
“While many employers are cautious about the slowing market, private credit and private equity firms are always looking for talent,” says Paul Herman, a Vice President within Tandym Pro’s Financial Services division. “If you are looking for a growth area in high demand, working in private markets can be a great move for you.”
Private investing explores two main avenues: private equity and private credit. While they intersect with one another, there are distinct differences among them.
The Private Equity Buyout strategy focuses on established, mid-market companies that either have a proven track record of profitability and are looking to further increase earnings or struggling businesses looking for some much-needed expertise and change. This is a sector that tends to attract candidates from M&A investment banking, for example. Venture capital, a type of PE strategy, focuses on investing in newer companies that don’t have a performance history, but show potential for scalability. These sometimes are disruptive businesses that can change the status quo of any sector. “Professionals with a banking background tend to thrive in this type of role,” explains Eric.
Lastly, private credit firms offer debt instruments to businesses looking to help finance acquisitions, grow their business organically, or other general corporate purposes. “Leveraged finance and coverage bankers tend to find success in private credit by applying their knowledge utilizing cross-capital structure solutions,” says Eric.
Read Also: Private Investing Career Paths: A Guide For Success
“All companies need investors to establish themselves in business. That is why an Investor Relations (IR) department is also needed; to keep lines of communication open between the investor and the asset manager,” says Paul. Investor Relations professionals are the front line and the public face of an asset manager. They maintain an integral part of not only the firm’s investor relationships, but also the fundraising process itself. This is a good career for anyone who has worked in investment banking or a client-service type role, especially within a financial institution. “As asset managers continue to be the lifeblood of institutional asset growth, and with growing uncertainty as to where to park long-term capital, more opportunities have become available in investor relations,” explains Paul. If you are looking for more of a client-facing role, this could be the right fit for you.
When market conditions and rising interest rates put a strain on everyday businesses, restructuring professionals become a necessity for credit investors. Investment bankers who are looking into the buyside career path typically will invest in distressed assets and work with companies that are going through turbulent times or special events.
Whether it be a bankruptcy, sell-off, downsizing, or when investments become a little more uncertain, firms tend to increase hiring in the job areas of portfolio management, restructuring, or distressed/special situations investing roles. “Firms are looking for someone with a restructuring or strong credit background to work with underperforming private investments,” says Paul. “To best prepare themselves for any impending hard times, firms tend to assemble teams of experienced individuals who have dealt with distressed types of conditions in a previous role.”
Skillsets that are most valuable in private market careers are the understanding of fundamental accounting principles and the possession of strong technical skills. Financial professionals who demonstrate strong modeling capabilities will have a greater competitive advantage over those whose technical skills are less cultivated. “Modeling capability and experience is in high demand and many finance professionals are behind in mastering this skill due to COVID setbacks,” Eric advises. “Spend your spare time financial modeling and articulating your findings. This will set you apart in your interviews and case studies.” Technical skills will continue to be of high importance, so it’s critical to invest time in building those skills.
While modeling skills are critical today, be sure to brush up on your interviewing skills from time to time. “When it comes to honing your skills, practice makes perfect,” says Eric. “Doing your homework with these practices will prove that the more familiar you are with your subject, the better you will perform in your case studies while interviewing.”